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AlterG, Inc. v. Boost Treadmills LLC
United States District Court for the Northern District of California
388 F. Supp. 3d 1133 (2019)
AlterG, Inc. (plaintiff) produced antigravity treadmills, which were based on patented technology, to be used for orthopedic rehabilitation. Between 2012 and 2015, AlterG launched its Low-Cost Platform Project (LCPP) to develop a new and more affordable technology, but AlterG ultimately decided not to sell any products related to the LCPP. Sean Whalen, Thomas Allen, and Michael James Bean (the former employees) (defendants) were former employees of AlterG who had intimate knowledge of the LCPP and AlterG’s other proprietary information. Each of the former employees signed nondisclosure agreements in which they agreed not to use or disclose AlterG’s proprietary information. After leaving AlterG, the former employees formed a company, Boost Treadmills LLC (Boost) (defendant), to develop and sell antigravity treadmills. AlterG sued Boost and the former employees, alleging, in part, that they had misused AlterG’s proprietary information. AlterG’s complaint included claims of trade-secret misappropriation and breach of fiduciary duty. In its complaint, AlterG used broad and categorical terms to identify the scope of the trade secrets that were allegedly misappropriated. The breach-of-fiduciary-duty claim was against Whalen, who had previously served as AlterG’s director, and AlterG argued that the fiduciary duty Whalen owed AlterG continued even after Whalen had left AlterG. Boost and the former employees filed a motion to dismiss AlterG’s complaint, arguing, in part, that AlterG had failed to specifically plead which technologies or information they had allegedly misappropriated. Furthermore, because AlterG had failed to attach the confidentiality agreements to the complaint, Boost and the former employees argued that the specific trade secrets could not be ascertained.
Rule of Law
Holding and Reasoning (Chen, J.)
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